Nutanix(NTNX) - Get Report stock is an attractive investment opportunity right now. Shares are likely to rally next week when the quiet period for the company's recent initial public offering expires.
On Tuesday, analysts at the investment banks that underwrote the IPO will be able to initiate ratings and issue research reports on the stock. These reports are likely to be positive, as Nutanix is a solid company with strong fundamentals. Because the underwriters are influential investment banks, their reports should have a significant impact on the stock.
To benefit from the likely pop in share price following the IPO quiet period expiration, investors should establish a long position in Nutanix this week. When the quiet period expires and the analysts' reports start coming out, investors should sell their shares.
Nutanix offers enterprise-level, cloud-based services designed to integrate the three traditional IT silos of server, storage and virtualization into a single solution. Acropolis, one of the company's software products, delivers application mobility and performance distributed storage solutions. Prism, another product, delivers integrated virtualization and infrastructure management, operational analytics and one-click administration solutions.
Nutanix's software product portfolio addresses a range of applications, including databases, virtual desktop infrastructure, enterprise applications, big data analytics and unified communications. Nutantix's portfolio serves a wide range of industries, including education, automotive, energy, consumer goods, financial services, media, health care, technology, retail and communications.
Nutanix has a diverse, notable client base that includes end users like the U.S. Department of Defense, Total, NTT SmartConnect, Yahoo!, Toyota, Kellogg, Nordstrom, Nintendo, Nasdaq, Best Buy and Activision.
Nutanix's revenue has been growing at a quick clip. Revenue was $444.9 million for fiscal 2016, which ended on July 31. That was up significantly from $241.4 million in fiscal 2015 and $127.1 million in fiscal 2014.
The company is still in a growth phase, and net losses were $168.5 million in 2016 and $126.1 million in fiscal 2015.
When Nutanix went public on Sept. 29, its stock surged more than 131% on its first day of trading, Nutanix shares priced at $16, above the expected IPO range of $13 to $15. Shares recently traded at $29.91. Although that's down 18% since the first day of trading, it's still significantly higher than the IPO pricing.
NTNX's influential group of underwriters includes Goldman Sachs, J.P. Morgan, Morgan Stanley, Credit Suisse, Robert Baird & Co., Needham & Co., Pacific Crest Securities, Piper Jaffray, Raymond James & Associates, Stiefel, William Blair and Oppenheimer.
When this strong group of underwriters is allowed to release detailed reports and initiate coverage, shares of Nutanix will likely experience a pop in price. In order to take advantage of this uptick, investors should establish long positions in Nutanix shares before the quiet period expiration. After reports are released, investors should exit existing positions.
This article is commentary by an independent contributor. At the time of publication, the author held NTNX positions in the stocks mentioned.